[Satellite TODAY Insider 11-18-10] Satellite semiconductor-based components and subsystems provider Emcore continues to battle back from a brutal first half this year and has received a revolving credit facility from Wells Fargo after terminating its prior $14 million loan agreement with Bank of America, Emcore announced Nov. 17.
    Emcore’s new asset-based credit facility allows the company to borrow up to $35 million for working capital requirements, letters of credit and other general corporate purposes. The company’s previous agreement with Bank of America allowed for a maximum of $25 million in issued credit. Emcore said it would invest some of its new funding into broadband, fiber optic, satellite, and terrestrial solar power product development.
    According to documents filed with the U.S. Securities and Exchange Commission (SEC), Emcore’s credit facility bears interest at a yearly rate equal to the daily three month LIBOR rate for the applicable interest period plus 3 percent. Amounts borrowed under the loan may be repaid and re-borrowed through Nov. 11, 2013.
    The company already borrowed $5.4 million under the new facility on Nov. 12 and used the proceeds to repay the entire balance of its $5.19 million loan and security agreement, signed in September 2008 with Bank of America – effectively terminating the deal between the company and its previous creditor.
“This new credit facility, combined with our existing cash position and improved operating performance over the past year, ensures that we have the financial capability required to support our strategic plan,” Emcore CFO Mark Weinswig said in a statement.
   Weinswig, who recently joined Emcore in October, said his company ended its arrangement with Bank of America after undertaking an assessment of its liquidity and working capital needs. “At the time of termination, the company was in compliance with all covenants under the prior credit agreement. The company will not incur any penalties in connection with the termination,” Weinswig said.
   The company recently fell into trouble with NASDAQ’s $1.00 minimum bid price requirement, but regained compliance last month. Excesses in obsolete inventory reserves related to the company’s fiber optics segment and increases to accumulated deficits impacted the company’s 2010 third quarter performance, resulted in the reduction of cost of revenue of approximately $1.2 million. Revenue for its third fiscal quarter were $46.6 million – a slight sequential decline from the same period in 2009, due to a timing issue with a major shipment.

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